Essendi v London Property: Disclosing a Part 36 Offer's Date [2026]

Detailed Assessment — 2026-10-02

After a preliminary trial, the judge could be told the date of the defendant's first Part 36 offer without learning its protected terms. Essendi permits consideration of an earlier-period costs application; it does not decide whether the requested costs should be awarded.

Overview

Date: 2 October 2026

Judge: His Honour Judge Stephen Davies, sitting as a High Court Judge

Court: High Court of Justice, Technology and Construction Court

Citation: [2026] EWHC 2501 (TCC)

Hearing date: 18 September 2026

Nature of Proceedings: Preliminary determination of whether the trial judge could be told the date of a defendant's Part 36 offer following a trial of preliminary issues

Key Issues:

The scope of CPR 36.16 after part of a case has been decided
Whether the date of a Part 36 offer forms part of its protected terms
Enabling a costs application before the remaining issues are tried
Distinguishing permission to disclose an offer's date from entitlement to a costs order
The treatment of earlier decisions about costs in split trials

In Essendi UK Hotels 2 Limited v London Property Company Limited [2026] EWHC 2501 (TCC), the High Court held that the judge could be told the date of the defendant's first Part 36 offer after deciding preliminary issues, even though he would also try the remaining issues. The offer's substantive terms remained protected. The ruling allowed the claimant to pursue an application for costs for an earlier period; it did not decide whether those costs should be awarded.

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The Facts

HHJ Stephen Davies tried preliminary issues between Essendi and London Property Company from 4 to 12 March 2026. His substantive judgment, handed down on 5 June 2026, was [2026] EWHC 1354 (TCC). Essendi was substantially successful at that trial. The same judge was allocated to try the remaining issues, making the restrictions on disclosure to the trial judge important.

Essendi wished to seek its costs of the proceedings down to the date 21 days after the defendant's earliest Part 36 offer. Its argument was that, whatever effect the offer might have on later costs, an order for the earlier period should be considered following its success at the preliminary trial: [1] to [6].

The defendant argued that CPR 36.16 prevented the judge being told the offer's date. If correct, that would prevent Essendi even identifying the end date of the period for which it sought costs. The parties therefore agreed that the disclosure question should be decided first, before incurring the expense of a substantive costs hearing: [9].

The judge decided the preliminary question in Essendi's favour. At [49], he concluded:

> I conclude that I may be told the date of the first Part 36 offer made by the Defendant.

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Key Holdings

1. The protection changes after a part or issue has been decided

The judgment sets out CPR 36.16 at [7]. Under rule 36.16(2), both the fact that a Part 36 offer has been made and its terms must generally be kept from the trial judge until the case has been decided. The definition in rule 36.3 requires all issues to have been determined, whether at one or more trials: [29].

The rule contains exceptions. Where a part or issue has been decided, an offer relating only to the decided parts or issues falls within rule 36.16(3)(d). Rule 36.16(4) separately permits the judge to be told whether other Part 36 offers exist, while continuing to protect their terms unless one of the specified exceptions applies.

Essendi concerned the latter situation. The question was what the judge could be told about an offer whose terms remained protected while the case continued.

This matters to the scope of the decision. It is not permission to disclose an offer's date to the trial judge before any part of the case has been decided. The judge accepted that the initial prohibition covers information about the offer's existence, including its date: [29] to [32].

2. An offer's date is not one of its terms

The defendant argued that the date formed part of the offer's terms and remained prohibited information. The judge rejected that construction by examining Part 36 as a whole: [35] to [40].

Rule 36.5 deals with the form and content of the offer, including the period for acceptance, the extent of the claim covered and the treatment of any counterclaim. Rule 36.7 separately addresses when an offer is made, identifying service on the offeree as the relevant event.

The distinction also appears in the rules on withdrawal and changes of terms. An offer's terms can change, but the historical date on which it was made cannot change in the same sense: [36]. Likewise, the provisions dealing with a stay on acceptance and enforcement of the terms do not naturally treat the date as a contractual obligation: [37].

Finally, rule 36.17(5) lists the terms of an offer and the stage at which it was made as separate considerations: [38].

The conclusion at [40] was that the date belongs to the facts surrounding the making of an offer, not its substantive terms. When rule 36.16(4) permits disclosure about the existence of an offer after a part of the case has been decided, the date may therefore be communicated without disclosing the protected terms.

3. Earlier costs decisions did not settle this construction question

The judgment carefully distinguishes a decision not to award costs from a prohibition on receiving information needed to consider costs.

In AB v CD [2011] EWHC 602 (Ch), Henderson J knew the relevant offer's date but declined to make an order for the earlier costs. That was an exercise of discretion, not a finding that the date could not be disclosed: [12].

Similarly, Lifestyle Equities CV v Sportsdirect.com Retail Ltd [2018] EWHC 962 (Ch) concerned whether determining costs before the later stage of the litigation would be appropriate. It did not resolve the narrow disclosure issue: [16] and [17].

The defendant also relied on Original Beauty Technology Company Ltd v G4K Fashion Ltd [2021] EWHC 954 (Ch), which referred to the court being unable to know when the offer was made. HHJ Davies examined the context of that observation and concluded that it was not a considered construction of rule 36.16(4) following argument on this point: [18] to [20].

The lesson is to identify what an earlier decision actually determined. A court reserving costs does not necessarily lack power to consider them. Nor does an observation about unavailable information necessarily decide whether that information is legally protected.

4. Langer supported the context, but did not determine the offer-date issue

Langer v McKeown [2021] EWCA Civ 1792 concerned a Calderbank offer in litigation with split issues, rather than a Part 36 offer. The Court of Appeal rejected the proposition that the judge was effectively bound to defer costs simply because such an offer existed: [21] to [23] of Essendi.

Green LJ had also discussed Part 36 and the possibility of making an order for costs incurred before an offer. HHJ Davies considered those observations, but found no express determination of whether CPR 36.16 permitted the date to be disclosed. He therefore placed no real weight on Langer when resolving the narrow construction question: [25] to [27].

That distinction preserves the status of the reasoning. Essendi does not present the Court of Appeal as having already decided this precise point. It resolves the point through its own reading of the rules, while recognising the wider context in which costs may be considered at successive stages of litigation.

5. The purpose of the rule supports limited disclosure

The 2015 amendments addressed the problem that a judge who had decided a first trial could previously not even be told whether Part 36 offers existed. That restriction could require the first trial's costs to be reserved: [11] to [13].

The amended rule also protects the remaining trial from the influence of an offer's substantive terms. HHJ Davies explained at [44] that allowing the date to be disclosed served the first purpose without revealing the protected terms.

He rejected the suggestion that knowing when an offer was made necessarily allowed the judge to infer a party's view of the merits. A defendant might make an early offer for several reasons, including controlling irrecoverable costs or testing the claimant's willingness to continue. By the end of a preliminary trial, the judge would already know far more about the litigation from the evidence: [45] to [47].

These observations support limited disclosure, not wholesale disclosure. The decision does not permit the parties to reveal the offer's amount, settlement obligations or other substantive terms merely because a preliminary trial has concluded.

At [47], the judge also referred to commentary citing Garratt v Saxby (Practice Note) [2004] EWCA Civ 341 on the discretion to continue a trial or recuse following a disclosure breach. That was supporting context, not a determination of a breach or recusal application in Essendi. It does not justify deliberately disclosing protected terms.

6. The identity of the offeror was not a separate contested issue

The reasoning discusses who made an offer as well as when it was made. However, the defendant had already agreed that the judge could be told it was the offeror. At [14], HHJ Davies expressly recorded that he was not asked to determine that point.

The formal decision at [49] concerns the date of the defendant's first offer. Practitioners should retain that distinction when citing the judgment. Its discussion of the offeror's identity is relevant reasoning, but it should not be described as a separate determination of a contested disclosure application.

7. Permission to disclose does not mean entitlement to recover

The claimant wanted an order extending to 21 days after the defendant's earliest offer. The judgment allowed the court to learn the date needed to identify that period. It did not decide the substantive application, fix a sum, award a payment on account or determine the appropriate basis of assessment.

At [6], the judge described the argument advanced for an earlier-period costs order. At [9], he explained why the disclosure issue should be decided before the substantive costs hearing. The distinction is central: removing the information barrier allows an application to be considered; it does not establish that the application must succeed.

Part 36 also remained a self-contained procedural code. At [10], the judge referred to Gibbon v Manchester City Council [2010] 1 WLR 2081 and Coward v Phaestos [2014] EWCA Civ 1256. His approach was to construe that code, not to displace its protections through a general appeal to fairness or early costs recovery.

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Practical Implications

For Costs Lawyers

1. Identify the disclosure stage first. Establish whether the whole case, a part or issue, or nothing has yet been decided. The permitted information changes with that procedural position.

2. Separate date and terms. Where Essendi applies, the costs submission can identify the offer date without reproducing the offer or revealing its financial and other substantive terms.

3. Define the costs period precisely. Explain the proposed cut-off and the work falling within it. Essendi permits the necessary date to be disclosed; it does not supply the merits of the application.

4. Distinguish an earlier-period order from Part 36 consequences. The court's consideration of costs before the later trial is not the same exercise as deciding the eventual consequences of beating or failing to beat an offer.

For Litigation Practitioners

1. Consider costs after a substantial preliminary success. An existing Part 36 offer does not, under this ruling, prevent the court learning its date when deciding whether to consider an earlier-period application.

2. Keep protected documents out of the trial material. Do not attach the full offer merely to establish its date. Seek a direction or resolve any dispute about the permitted disclosure before putting the information before the judge.

3. Do not overstate the outcome. Essendi decides a preliminary disclosure question. Clients should not be advised that it guarantees immediate recovery of the preliminary trial's costs.

4. Identify what an authority actually decided. Decisions reserving costs and observations about offer confidentiality need to be read in their procedural context, especially where the underlying offer was a Calderbank offer rather than a Part 36 offer.

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Conclusion

Essendi removes a specific obstacle to considering costs after a preliminary trial. The trial judge may learn the date of the defendant's first Part 36 offer while remaining unable to learn its protected substantive terms before the remaining issues are decided.

The decision is useful because it separates three questions: what the judge may be told, whether an immediate costs application should be entertained and whether the requested costs should be awarded. Only the first was decided. Keeping those questions separate allows practitioners to use the ruling without promising a costs recovery that the judgment does not establish.

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Analysis by Mackenzie Costs, costlawyer.co.uk.

Citation: Essendi UK Hotels 2 Limited v London Property Company Limited (Preliminary issue Part 36 CPR) [2026] EWHC 2501 (TCC)

Full judgment available at: The National Archives

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